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Home » Tax in Different Regions » Taxation In Colombia
 

Taxation In Colombia
The Congress of Colombia, the Municipalities of Colombia councils and the Departments of Colombia Assemblies handle the Taxation In Colombia. These bodies are associated with determination of tax rates in Columbia and also works on what kind of taxes to be imposed on. The taxation policy in Columbia was cruel and diffused and this was inherited from the Spanish Empire. According to this tax system very high number of different taxes were imposed on the individuals and other entities of Columbia.

The different taxes in Columbia were mainly based on customs. This was because of the low capacity of local production of goods. In Columbia both the local government's budgets and national government's budget run significant deficits. Apart from income tax 15% VAT is imposed in Columbia. The other taxes levied in Columbia are municipal and property taxes. In case of legal documents stamp taxes are levied. According to the taxation in Columbia the personal income tax rates vary from 10% to 35%. On corporate income 35% flat tax is imposed. According to the taxation in Columbia some indirect taxes are also imposed which include, a 5% surcharge on imports, a tax on exported goods and services, a gasoline tax etc. Local taxes on vehicles and property are also levied.

The tax structure of Columbia was modernized during the formation of 1960-tax law. Insufficient revenues gave rise to fiscal problems in Columbia. In August 1974 the fiscal measures which came into effect made significant changes in the taxation of Columbia. The new fiscal measures included, removal of tax exemptions for government companies, a revision of property, income, and sales taxes. It also included a reduction in tax incentives for exporters. This tax reform aimed at bringing a progress in promotion of economic stability, in tax assessment scales, and a reduction in the cases of tax evasion. Another reform in taxation in Columbia came to effect in December 1982. The reform measures came in the midst of a budgetary crisis and the motivation behind this tax was a clampdown on tax evasion and avoidance. The emergency package offered a chance to make corrections in tax returns and pay the due tax without extra penalty to the taxpayers who had omitted assets or stated nonexistent liabilities. This was mainly targeted to the people had gained from the drug trade. The year 1990 is significant in the taxation of Columbia. During this time the Government of Columbia was considering to raise the tax levels to enhance the economy of the country. Tax avoidance was very common. The corporate income tax in Columbia from 35% was raised to 38.5% for the year 2003 and 2004. In 2005 this tax was supposed to come down to 36.7%. The domestic companies and the branches of foreign companies resident in Colombia, both are taxed in the same rate. For the foreign companies a remittance tax of 7% exists. In the year 2002 a tax on companies and individuals with possessions over 170 million Colombian Pesos had to pay a one-time tax at 1.2%. In Columbia the individual income is taxed with 35% as the highest marginal rate. The value-added tax (VAT) is the main indirect tax in Colombia.